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Nonresidential Building Construction Falls in January

0 2050 Market Intelligence

Nonresidential building construction spending fell 1.5% in January after increasing 1.2% in December. However, comparing January 2012 to January 2011, spending was up 9.2%.

Nonresidential building construction spending fell 1.5% in January after increasing 1.2% in December. However, comparing January 2012 to January 2011, spending was up 9.2%.

“For lease” private projects spending dropped 2.0% following a 0.8% decline in December. On a year-over-year basis, for lease spending increased 3.9% in January. All three components of for lease construction projects (lodging, office, and retail) fell for the second month in a row. But from January 2011 to January 2012, office and retail construction spending were up — 1.5% and 7.7%, respectively. Hotel construction was down 2.4% over the same period.

Construction spending for institutional projects inched up 0.1%, after rising 0.9% in December (revised up from
-0.2%). Health care construction spending rose for the third month in a row, up 0.9%. On a year-over-year basis, health care was up 10.3%, while total institutional construction was up 6.2%.

Ending a string of six monthly increases, manufacturing construction spending fell 6.3% in January. December’s originally reported jump of 13.4% was revised down to a 6.7% increase. Comparing January 2012 to January 2011, manufacturing construction spending was still up a strong 38.4%.

Developments in Europe and the threat of even higher oil prices for a sustained period are the chief risks to the forecast. Nonetheless, the expectation is for spending totals to strengthen throughout 2012 and 2013 as the economy continues to grow and companies expand in response to growing demand. Low long-term interest rates continue to be a positive for investment in plant and equipment. Increasing domestic demand and greater exports to Asia and South America are expected to more than offset the likely slowdown in exports to Europe.

The forecast is for nonresidential construction spending to increase 5.8% in 2012 and to strengthen in 2013, advancing 8.3%.

U.S. Nonresidential Construction
(billions of U.S. current dollars)

  Monthly Figures*
(latest actual values)
3-Month
Moving Average
Actual Forecast
  Nov-11 Dec-11 Jan-12 Nov-11 Dec-11 Jan-12 2008 2009 2010 2011 2012 2013
Lodging 8.808 8.706 8.369 8.638 8.654 8.628 35.806 25.499 11.329 8.554 8.936 9.819
  Month-over-Month % Change 4.3% -1.2% -3.9% 1.1% 0.2% -0.3%            
  Year-over-year % Change (NSA) -12.8% -12.4% -2.4%       24.7% -28.8% -55.6% -24.5% 4.5% 9.9%
Office 35.363 34.920 34.469 34.882 34.866 34.917 68.563 51.908 37.573 34.516 36.765 40.562
  3.1% -1.3% -1.3% 1.1% 0.0% 0.1%            
  0.7% -0.6% 1.5%       5.1% -24.3% -27.6% -8.1% 6.5% 10.3%
Commercial (mainly retail) 44.312 44.123 43.130 44.252 43.980 43.855 86.212 54.069 40.522 43.559 44.813 48.396
  1.9% -0.4% -2.3% -1.3% -0.6% -0.3%            
  14.0% 13.6% 7.7%       -3.9% -37.3% -25.1% 7.5% 2.9% 8.0%
Health Care 40.376 40.963 41.326 40.014 39.985 40.888 46.902 44.845 39.879 39.957 42.466 46.285
  4.6% 1.5% 0.9% -0.2% -0.1% 2.3%            
  -1.2% 2.1% 10.3%       7.2% -4.4% -11.1% 0.2% 6.3% 9.0%
Education 86.185 87.185 86.822 86.434 86.490 86.731 104.890 103.202 88.227 84.797 87.535 92.306
  0.1% 1.2% -0.4% 0.1% 0.1% 0.3%            
  3.0% 4.7% 6.0%       8.4% -1.6% -14.5% -3.9% 3.2% 5.5%
Religious 3.775 3.880 3.744 3.987 3.899 3.800 7.225 6.192 5.208 4.136 3.942 4.225
  -6.6% 2.8% -3.5% -3.7% -2.2% -2.5%            
  -25.2% -20.3% -22.8%       -4.2% -14.3% -15.9% -20.6% -4.7% 7.2%
Public Safety 10.455 10.433 10.460 9.983 10.185 10.449 13.083 13.787 11.118 9.972 10.476 10.682
  8.2% -0.2% 0.3% 0.7% 2.0% 2.6%            
  3.1% 8.2% 8.7%       28.3% 5.4% -19.4% -10.3% 5.1% 2.0%
Amusement/Recreation 15.874 15.656 15.977 15.956 15.794 15.836 21.829 19.404 16.959 15.539 16.451 17.589
    -1.4% 2.1% 0.6% -1.0% 0.3%            
  -7.5% -3.4% 4.4%       2.9% -11.1% -12.6% -8.4% 5.9% 6.9%
Manufacturing 41.189 43.957 41.197 40.871 42.002 42.114 53.234 56.836 38.106 37.087 42.987 48.876
  0.8% 6.7% -6.3% 0.8% 2.8% 0.3%            
  28.3% 41.7% 38.4%       31.0% 6.8% -33.0% -2.7% 15.9% 13.7%
Total** 286.337 289.823 285.494 285.017 285.855 287.218 437.744 375.742 288.921 278.117 294.370 318.741
  1.8% 1.2% -1.5% 0.1% 0.3% 0.5%            
  5.0% 8.0% 9.2%       8.4% -14.2% -23.1% -3.7% 5.8% 8.3%

* Monthly figures are seasonally adjusted at annual rates (SAAR figures).
** Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data.

by Bernie Markstein last update:Mar 27, 2012

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